Fixing an unregistered out-of-state boat? Beware "use tax"

[Cyrus Safdari]

So you live in, say, Mass. and you bought a boat from out-of-state less than 6 mos before you brought it to your place in Mass, hoping to fix 'er up and then retire on her out of state?

Repairing a boat is a form of use, so you should have paid the use tax (Thomson, Mass App Tax Bd Docket 170328 Oct 11, 1990)

i for one was surprised but
I dont even pretend to be any sort of legal tax expert so I'll leave that here and let you reach your own conclusions.

[psk125]

That's what the MA government site says.
https://www.mass.gov/info-details/sa...nd-snowmobiles
That's why people fix their boats in Rhode Island or maybe New Hampshire.

[Cyrus Safdari]

do they not have use taxes in those states? Calif will charge a use tax for a stored boat apparently

[nightowle]

I'll assume there's actually a question in your original post. The vast majority of jurisdictions will charge either a sales tax or a use tax. Very rarely are there exceptions.

[Chotu]

There should be an exemption for going to get your boat fixed. It's criminal not to have it. Especially criminal toward the marine repair businesses.

[letsgetsailing3]

Originally Posted by Chotu

There should be an exemption for going to get your boat fixed. It's criminal not to have it. Especially criminal toward the marine repair businesses.

In most places it's criminal not to pay sales tax. Turns out nobody wants to pay 'em.

If you paid sales tax, there is normally a way to get that deducted from your local tax, or a way to pay your local tax rather than that of the locale where you purchased.

Even John Kerry was unsuccessful in avoiding boat taxes in Massachusetts, so you know they're serious there.

The long and the short of it is to know the tax laws where you're buying/keeping your boat.

[Renegde_Sailor]

I am a resident of Montana, it cost me $125.00 to get a permanent registration for my boat that never expires.

Some states are better than others.

[Orion Jim]

Originally Posted by letsgetsailing3

In most places it's criminal not to pay sales tax. Turns out nobody wants to pay 'em.

If you paid sales tax, there is normally a way to get that deducted from your local tax, or a way to pay your local tax rather than that of the locale where you purchased.

Even John Kerry was unsuccessful in avoiding boat taxes in Massachusetts, so you know they're serious there.

The long and the short of it is to know the tax laws where you're buying/keeping your boat.

It took John Kerry FIVE YEARS to decide to pay Massachusetts taxes…and we still can’t verify he ever did, typical.

[Montanan]

Sales and Use taxation are types of privilege taxes.

The presence of an asset in a jurisdiction is a privilege and the mere presence is a use.

Use tax is a tax that is imposed on the use, storage, or consumption of goods and services that were purchased without paying sales tax. It is typically imposed by the state or local government where the goods or services are used, and the rate is often the same as the sales tax rate. Use tax is designed to ensure that people who purchase goods and services from out-of-state vendors or online retailers pay the same amount of tax as they would if they purchased the goods or services locally. Like sales tax, use tax revenue is used to fund various government programs and services.

Enjoy your fully paid privilege.

[SailingHarmonie]

There are states that have a sales tax excemption for repairs, but they are very limited and anybody using it needs to be very careful.

Florida has such an exemption, IF you are having work done at a licensed boat yard, and for no more than a specified amount of time. You need to document it and get the boatyard to signoff on it. The aim here is rational: It is to get people buying big expensive boats to spend the repair money with Florida's boatyards.

Doing the work in your own back yard, doesn't cut it.

I personally don't understand why you would expect an exception for something you BUY with an aim to repair. ANYTHING else you buy, you pay sales tax on. Why should the boat you buy to repair be ANY different?

Maybe you would prefer to pay tax on the value of the boat AFTER you repair it??? I think not...

[Montanan]

Originally Posted by Renegde_Sailor

I am a resident of Montana, it cost me $125.00 to get a permanent registration for my boat that never expires.

Some states are better than others.

And The Last Best Place [Montana] does not have any sales or use taxes.

Also, there is another thing Montana does not have:

[Montanan]

Originally Posted by Renegde_Sailor

I am a resident of Montana, it cost me $125.00 to get a permanent registration for my boat that never expires.

Some states are better than others.

Hey Renegde, your profile indicates that you are located in Alaska with a wonderful older 42ft. Spencer.

Is the boat you purchased a permanent registration for Montana located here in 406 Country?

A boat can only be validly registered within the state of principal use.

Your residency is not a factor for vehicle or vessel registrations. The situs of the vessel determines which state it needs to be registered.

FYI:

"All boats principally used in Alaska are required to be registered unless specifically exempted.

All boats longer that 24 feet are required to be titled unless documented by the USCG. Boats that are 24 feet or less have the option of getting a title. Liens must be recorded. USCG documented vessels must also be registered with Alaska if the vessel is principally used in Alaska.

*Please Note: Boats that are not principally used in Alaska must be registered in the state where they are used. Alaska residents, such as military members or college students that live outside of the state cannot register their boats in Alaska. This is required by federal law and there is no exemption for any group."

Exempt from registering in Alaska

The following do not need to be registered:
a ship’s lifeboat
a seaplane
an inspected passenger vessel; and
single air mattress, single inner tube, or other water toy
Non-powered boats - Unless a boat has an auxiliary power unit or is used as a sport fishing guide’s boat, non-powered boats (such as kayaks and canoes) are not required to be registered.
Registered elsewhere- A boat with a valid registration from another state or country that is not operated more than 90 consecutive days in Alaska.
Owned by a government - A boat owned by the United States or an entity or political subdivision of the United States, or a boat owned by a state or an entity or political subdivision of a state. Under FEDERAL law, recreational type public vessels must still be state registered. [33 CFR Subpart B Sec. 173.11(b)]
A foreign documented boat


Exempt from titling in Alaska
An undocumented boat 24 feet or less in length (titling is optional)
A boat of any length documented with the U.S. Coast Guard
*Please Note: A documented boat is also exempt from state numbering; however, the State of Alaska registration decal must be displayed.

[George_SD]

California will tax you on boat you are dreaming about and will require a proof of insurance on it too

[Chotu]

Originally Posted by George_SD

California will tax you on boat you are dreaming about and will require a proof of insurance on it too

We have a winner today! Hilarious

[Renegde_Sailor]

Originally Posted by Montanan

Hey Renegde, your profile indicates that you are located in Alaska with a wonderful older 42ft. Spencer.

Is the boat you purchased a permanent registration for Montana located here in 406 Country?

A boat can only be validly registered within the state of principal use.

Your residency is not a factor for vehicle or vessel registrations. The situs of the vessel determines which state it needs to be registered.

FYI:

"All boats principally used in Alaska are required to be registered unless specifically exempted.

All boats longer that 24 feet are required to be titled unless documented by the USCG. Boats that are 24 feet or less have the option of getting a title. Liens must be recorded. USCG documented vessels must also be registered with Alaska if the vessel is principally used in Alaska.

*Please Note: Boats that are not principally used in Alaska must be registered in the state where they are used. Alaska residents, such as military members or college students that live outside of the state cannot register their boats in Alaska. This is required by federal law and there is no exemption for any group."

Exempt from registering in Alaska

The following do not need to be registered:
a ship’s lifeboat
a seaplane
an inspected passenger vessel; and
single air mattress, single inner tube, or other water toy
Non-powered boats - Unless a boat has an auxiliary power unit or is used as a sport fishing guide’s boat, non-powered boats (such as kayaks and canoes) are not required to be registered.
Registered elsewhere- A boat with a valid registration from another state or country that is not operated more than 90 consecutive days in Alaska.
Owned by a government - A boat owned by the United States or an entity or political subdivision of the United States, or a boat owned by a state or an entity or political subdivision of a state. Under FEDERAL law, recreational type public vessels must still be state registered. [33 CFR Subpart B Sec. 173.11(b)]
A foreign documented boat


Exempt from titling in Alaska
An undocumented boat 24 feet or less in length (titling is optional)
A boat of any length documented with the U.S. Coast Guard
*Please Note: A documented boat is also exempt from state numbering; however, the State of Alaska registration decal must be displayed.

I am just cruising up here for the summer, then heading for Mexico, eventually going to wind up sailing up the east coast, playing in El Caribe and heading for Europe.

If I was staying in Alaska I would register it here, I am considering moving up here, but right now going cruising!